Are you just having this issue when you are trying to change your avatar on the console? I also ran into this a couple of weeks ago, and all I needed to do was delete and redownload my profile and it seemed to work again just fine. I would also check to
see if you can use those award items on xbox.com. I was able to use everything on xbox.com before my delete and redownload.
So, delete and redownload the profile, and you should be good!
Hope this helps.
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